Spouse's share of Insurance Premium paid from FSA

[Guest msearle]

Can a plan participant pay for his/her spouses insurance premium from his/her FSA if the spouse does not have a Cafeteria Plan offered by his/her employer?

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[Joe Priselac]

The simple answer is no.

[JWK]

Expanding a little bit...

According to IRS regulations, health insurance premiums cannot be paid through a medical expense FSA. See Treas. Reg. 1.125-2, A-7, (B)(4).

However, I believe it is possible to set up a separate reimbursement account that only reimburses eligible health insurance premiums, i.e. those that would be deductible under Code section 213. You need to be very clear with your TPA that the premiums have to be reimbursed from a separate account than the health FSA. I think the rules would be similar as for a DCAP (no uniform coverage rule, but there would be a use it or lose it rule).

[Guest msearle]

Thanks for the assistance

[SLuskin]

You can never pay for a spouse's employer-sponsored insurance premium through a cafeteria plan. The spouse's employer has to sponsor a Cafeteria Plan if that premium is ever to be pretaxed.

You can pay for private individual health insurance premiums through a separate FSA set up only for insurance premiums. However, the policy has to be owned by the employee and not the spouse.